A Comprehensive Analysis: Starting from 1996, Who is Laying the Foundation for the Next Generation of Capital Markets

Introduction: The Underwater Part of the Iceberg

This article comes from Tiger Research. What the market refers to as asset tokenization is merely the tip of the iceberg. The real transformation is happening beneath the surface, where the traditional financial infrastructure worth trillions of dollars is being restructured.

Many observers view the on-chain representation of U.S. Treasury bonds as the entirety of the RWA market, which only scratches the surface. The true transformation lies not in the visible aspects of asset digitization, but in the comprehensive reconstruction of the financial infrastructure that has long been submerged: the underlying tracks that support every transaction, including clearing systems, settlement layers, and liquidity networks.

The scale is already significant. According to Broadridge data, its DLR platform processes approximately $7.7 trillion in on-chain repo transactions each month; DTCC has also entered the realm of Treasury tokenization. Both are not pilot experiments but actual operational components within the financial market structure. The Hong Kong government issued HKD 6 billion in digital green bonds through HSBC Orion, immediately deploying them as repo collateral, showcasing a future where issuance and circulation merge into a single uninterrupted process.

The infrastructure layer for new financial standards is being assembled at this very moment. Institutions joining now will participate in defining this architecture before later entrants arrive.

1. The Internet of 1996 and the RWA Market

BlackRock CEO Larry Fink wrote in the 2026 shareholder letter: "We believe that the position of tokenization today is roughly equivalent to the internet in 1996."

1996 was a turning point. The internet existed, but most companies remained inactive. At that time, only 26% of Fortune 500 companies had integrated online business. Once early adopters demonstrated success, other companies rushed in, but by then, the pioneers had already solidified their positions.

The RWA tokenization market is at a similar juncture. Many institutions are still watching, but leading cases have already emerged. The most prominent is BlackRock's BUIDL (BlackRock USD Institutional Digital Liquidity Fund), an on-chain tokenized fund holding U.S. Treasury bonds. It launched in March 2024 and expanded to seven blockchains within 18 months. According to rwa.xyz data, the fund's market cap grew to approximately $2.5 billion.

The scale alone does not capture this transformation. The market has surpassed merely moving real-world Treasury bonds onto the blockchain. New financial services are layering on top of issued assets. Multiple DeFi protocols are using BUIDL as a base asset, and Binance has officially accepted BUIDL as collateral for trading.

According to rwa.xyz, as of May 2026, on-chain issued assets (Distributed Assets) amount to approximately $34 billion, more than 20 times the $1.5 billion at the beginning of 2020. If we also include Represented Assets, which are physical assets held in custody and recorded on-chain, the total scale reaches about $360 billion.

2. The RWA Market Has Been Activated

Asset tokenization is not just about converting existing financial products into digital forms. It changes the underlying way products operate, including settlement speed, post-trade infrastructure, and the entire processing workflow from start to finish. This approach is not meant to replace old systems but to build faster and more accurate new tracks on top of them.

Most discussions about RWA tokenization stop at BlackRock's BUIDL. While BUIDL is indeed a milestone case for the RWA market, a single sample cannot answer why tokenization is important.

Finance is far more than bond issuance. The repo market, securities settlement, and capital raising each carry different structural inefficiencies, and the value that tokenization can unlock varies accordingly. To understand why tokenization is important, we need to examine these sub-markets in their respective contexts.

2.1 Short-Term Financing Market (Repo)

Repo agreements are the defining transactions of the short-term financing market. Institutions borrow cash against bonds as collateral, returning the principal plus interest upon maturity in exchange for the bonds. Most contracts are overnight, with secure collateral and low interest rates, making these transactions routine.

Problem: Limited Operating Hours. The repo market only operates during system hours. Settlements occur once a day on business days, completely stopping on weekends and holidays. But risks do not stop. If adverse news arises over the weekend, losses measured by market value continue to accumulate without settlement. When the market opens on Monday, the accumulated exposure from the entire weekend hits in the form of a single margin call notification. Responding to this notification immediately is not realistic: selling bonds or liquidating through repos takes time. The only solution is to pre-allocate cash as reserves, but this capital is forced to remain idle due to the inability of the settlement infrastructure to operate continuously.

Solution: On-Chain Repo DvP Mechanism. On-chain repos structurally solve this problem, with the core being the DvP (Delivery versus Payment) mechanism. Its principle is similar to paying at a checkout: collateral and cash are exchanged simultaneously, and the situation where one party transfers funds first is structurally impossible.

In practice, the party seeking funds publishes the amount, interest rate, and maturity conditions, and the counterparty accepts. Both parties deposit their assets into a smart contract, which is a digital agreement that automatically executes when conditions are met. The borrower deposits tokenized bonds, and the lender deposits tokenized cash. Once both parties confirm receipt, the exchange is completed automatically.

Tokenized bonds and stablecoins flow on-chain 24 hours a day. Since they do not rely on old settlement infrastructure, collateral can move on Friday afternoons or Sunday mornings, eliminating the constraints of system operating hours. Settlement frequency also changes accordingly. In the old system, manual confirmation limited settlements to once a day; smart contracts automatically trigger margin calls and settlements the moment a position incurs a loss. Since there are no time gaps, there is no need to pre-allocate excessive cash reserves.

Case Study: Broadridge DLR.

Broadridge is a global capital markets infrastructure company that processes settlement and clearing processes for banks and brokerages through technology. The DLR (Distributed Ledger Repo) launched by the company is a distributed ledger repo trading platform built on the Canton Network's underlying blockchain.

Because it is based on blockchain, DLR is not constrained by the operating hours of old settlement infrastructure. Collateral movement and settlement can be executed on weekends and public holidays, and repo transactions can be initiated and closed at any time during the day, structurally alleviating the risks brought about by operating hour limitations. Smart contracts also automate the entire repo lifecycle, reducing settlement failures and disputes while enhancing the efficiency of collateral reuse.

As of April 2026, DLR's monthly settlement volume reached $7.7 trillion, with an average daily trading volume of $368 billion. Global banks such as HSBC, UBS, and Société Générale have participated in the platform.

2.2 Securities Settlement Infrastructure

Securities settlement occurs after a transaction is executed, where the buyer delivers funds, and the seller delivers securities. T refers to the transaction day. According to standard practice, settlement occurs on T+1 or T+2, meaning funds do not move until at least one to two days after the transaction.

Problem 1: Settlement Delays and Counterparty Risk. Real estate transactions provide a useful analogy. Signing a purchase contract does not immediately transfer ownership or complete payment; these occur days later. The transaction and asset transfer happen at different times.

Similarly, existing securities settlement infrastructure creates a time gap between transaction execution and asset transfer. If a counterparty defaults within this window, it can lead to significant losses. Central Counterparty Clearing Houses (CCPs) exist to prevent such events. CCPs act as intermediaries between buyers and sellers, so when one party defaults, the other does not have to bear the loss directly. In the U.S., this role is undertaken by NSCC, while in South Korea, it is handled by the KRX's clearing and settlement department.

Historically, there has never been a complete default involving a CCP, as the systemic consequences of a CCP failure are severe enough that member institutions and governments always intervene before it occurs. However, under extreme market conditions, CCPs have been pushed to their limits. During Black Monday in 1987, the Hong Kong Futures Exchange Clearing House nearly went bankrupt due to massive margin call failures, and the Hong Kong government had to inject capital and suspend trading for four days to resolve the situation. In the 2008 Lehman bankruptcy and the 2018 Nasdaq clearing crisis, some loss absorption funds were indeed depleted.

Problem 2: Fragmented Ledgers and Reconciliation Costs. When an equity transaction is executed, the issuer, custodian, clearing house, and settlement institution each record it in their own ledgers. The same transaction is recorded four times across four institutions. Since these ledgers are not synchronized in real-time, they need to be matched later through standardized messaging formats. This process is called reconciliation.

Ledgers do not always match. Each institution processes the same transaction at different times, and differences in internal system formats can lead to data loss or alteration during message conversion. When records are inconsistent, staff must manually identify and correct discrepancies. While some steps have been automated, errors still occur frequently. This is why personnel and system costs for reconciliation and position discrepancy handling have persisted over the long term. Corporate actions (events affecting corporate structure or shareholder rights, such as dividends, stock splits, and mergers) further complicate matters, as each institution must independently update its ledger and then reconcile, exponentially increasing the workload.

Solution: Shared Ledger + Atomic Settlement. Moving the securities settlement infrastructure on-chain changes two things: all participants see the same ledger, and transaction execution and asset transfer occur simultaneously.

Shared ledgers mean that the data of each participant is updated simultaneously during transaction records, eliminating the need for post-transaction reconciliation. Once cash and securities are placed in the same environment, the settlement delays that create counterparty exposure also disappear. When both cash and securities are on-chain, transaction execution and asset transfer can be bundled into a single transaction. Currently, cash flows through the banking system while securities flow through central securities depositories, keeping the two separate. After going on-chain, both exist in the same environment and execute simultaneously.

This is atomic settlement: if all conditions are met, the entire transaction is successful; if any condition fails, the entire transaction is canceled.

Case Study: DTCC.

On-chain securities settlement is already operational in real trading. The London Stock Exchange Group (LSEG) has deployed its digital settlement platform DiSH on Canton for securities settlement. Lloyds Bank completed a transaction purchasing tokenized UK government bonds with tokenized deposits, with the entire process from issuance to settlement handled on-chain.

The most significant case is DTCC. The Depository Trust & Clearing Corporation is the core infrastructure for U.S. securities settlement, handling the clearing and settlement of most traded securities in the U.S. DTCC has partnered with Digital Asset, the company behind the Canton Network, and received a no-action letter from the SEC in December 2025, which is a pre-commitment that the regulatory agency will not take action on specific activities. The goal is to launch an MVP (Minimum Viable Product) in the first half of 2026.

DTCC is an institution that could lose its license after a single settlement failure, and its decision to adopt on-chain infrastructure is not a casual experiment. Behind this is a careful judgment: the risks embedded in the current settlement architecture have exceeded the operational risks of migrating to a new track.

2.3 Capital Raising Market

The capital raising market is where governments and companies issue bonds and equity to raise funds. It is divided into the primary market (new securities issuance) and the secondary market (trading and utilizing issued securities among investors). Bonds represent a promise to repay principal plus interest; equity grants holders ownership stakes in the issuing company.

Issue 1: Delays in the Issuance Process. The longer the preparation period, the more uncontrollable variables accumulate for the issuer. Hedging costs rise, investor demand may change, and in the worst case, the transaction could completely fail. For every additional week on the timeline, the issuer bears an additional week of market conditions beyond their control.

Issue 2: Fragmentation of the Collateral System. Institutional investors purchase assets for returns, but the real issue lies afterward. If the purchased assets can be deployed in repos, used as collateral, or linked to other transactions, capital can continue to circulate. The smoother these connections, the more transactions the same asset can support, making it more valuable from the issuer's perspective.

However, even if counterparties agree on the use of collateral, execution is challenging. Collateral transactions require sequential qualification verification, haircut calculations, and title transfers, each involving different institutions whose systems are not interconnected. Each step requires staff to send messages and wait for confirmations. In this structure, there is a significant gap between the scale of issued assets and the actual usable scale.

Solution: On-Chain Issuance.

The entire issuance process operates on smart contracts. Within regulatory parameters, the agreed issuance terms are defined in code. After KYC and AML verification, the registration, allocation, and payment settlement for subscribers are processed automatically. Manual confirmations and message conversions are eliminated, significantly compressing the issuance cycle.

The structure for post-issuance utilization also changes. Tokenized assets exist in an environment where all participating institutions share the same data in real-time on the same network. Qualification verification, haircut calculations, and title transfers for collateral transactions are processed within a single workflow, eliminating the need to traverse independent systems. The ledgers previously maintained by issuers, underwriters, custodians, and collateral managers merge into one. Once assets are issued and utilized, they can immediately serve as collateral or underlying assets for other transactions.

This model's premise is issuance privacy. Issuance terms, underwriter allocations, subscription prices, and investor lists are data that cannot be publicly disclosed to the market. If such information leaks, market prices may fluctuate in advance, leading to higher costs for the issuer. Existing public permissionless blockchains only hide wallet addresses while exposing all transaction data to everyone. To scale on-chain issuance, it must operate on permissioned infrastructure where transaction data is only visible to relevant parties.

Case Study: HSBC Orion. HSBC is a global bank headquartered in the UK with assets of $3 trillion and is one of the leaders in bond underwriting and issuance. In 2023, it launched its own digital asset platform, HSBC Orion, as the infrastructure for digital bond issuance. HSBC Orion operates on the Canton Network.

In February 2024, the Hong Kong government issued HKD 6 billion (approximately USD 770 million) in digital green bonds through HSBC Orion. This was the first multi-currency digital bond issued by the government, covering HKD, offshore RMB, EUR, and USD. Over 50 global investors from eight nationalities participated, which is an unusually large participation base for early digital bond issuance. The settlement cycle was compressed from T+5 to T+1.

The significance of this issuance lies not in the issuance itself but in what happened afterward. Within days of the issuance completion, HSBC reached a repo transaction with Bank of East Asia (BEA) using the digital green bond as collateral. The bond was put to use as collateral directly on the same network the moment it went live in the market. This is the first confirmed case of seamless connection between issuance and utilization.

Its structure is as follows: when HSBC issues digital green bonds, the bonds are recorded as tokens in the Bond Registry on Canton. When HSBC executes the repo transaction with BEA, another application on the same Canton network uses the token as collateral and settles payment simultaneously.

The Hong Kong government did not view this issuance as a one-time event. The Monetary Authority subsequently launched a digital bond funding program, promising to subsidize half of the issuance costs for issuers of digital bonds, transforming a one-time experiment into a standard for market infrastructure.

2.4 Stablecoins and Payments

Stablecoins are digital currencies pegged to the U.S. dollar at a 1:1 ratio. Unlike conventional cryptocurrencies, their value remains relatively stable and can operate like currency circulating on the blockchain. USDC and USDT are the most typical examples.

Issue 1: Complete Public Disclosure of Transaction Data. On public blockchains, all transactions are visible to anyone. Who sent how much to whom at what time, and what the balance is can be instantly retrieved by searching a wallet address on a block explorer. Analyzing a company's stablecoin payment history can reveal the unit price negotiated with counterparties, seasonal revenue patterns, entry points for new markets, merger funding flows, and executive compensation. The improvement in payment efficiency is evident, but the complete public disclosure of transaction data is a structural limitation.

Issue 2: Disconnection from Internal Systems. When a company receives stablecoin payments, the funds arrive in a blockchain wallet completely independent of accounting systems, ERPs, and cash management platforms. Before the funds can be utilized, the finance team must manually withdraw them to a bank account, enter accounting entries, and then route them to where needed. Each step requires human intervention and time. Payments that arrive in seconds may take hours or even days to actually be put into operation, thus erasing the speed advantage.

Solution. Changing the design of blockchain infrastructure structurally addresses both issues simultaneously. Transaction data is only visible to relevant parties, and payment amounts, counterparties, and balances are not exposed to the public; only authorized regulatory agencies and compliance partners can access the records, allowing privacy and oversight to run in parallel. Payments connect directly to ERP and accounting systems upon arrival, allowing immediate utilization without intermediate steps.

Case Study: Bitwave. Bitwave is a digital asset accounting and cash management platform in the U.S., integrated with major ERPs like NetSuite, QuickBooks, and Sage Intacct. Bitwave has built a private B2B payment infrastructure based on stablecoins on the Canton Network. When an invoice is issued, Bitwave generates payment through smart contracts on the network. At the moment of payment execution, revenue is automatically recorded in the sender's ERP, and payables are automatically recorded in the receiver's ERP. SOC compliance audits run on the same data. Payments, accounting, and compliance are completed in a single workflow.

Transaction data does not leave the network. Only the trading parties and authorized auditors can view the records, while other participants on the network cannot see the transaction at all. Commercial information such as counterparty pricing, revenue models, and transaction frequency is fully protected. This is a result of the design of Canton’s smart contract language Daml, which defaults to shielding non-parties from transaction visibility.

3. Three Conditions for Institutions

The above cases span different fields and involve different institutions. They all operate on the Canton Network because this infrastructure meets the three conditions required by institutions.

3.1 Condition One: Transaction-Level Privacy

In government bond repo transactions, participating institutions can only see their own transactions as parties involved. In stablecoin payments, transactions can be settled while balances and counterparty information are not exposed to the market.

If transaction data is open to everyone, positions are exposed to the market, and participants face the risk of front-running; if all information is shielded, regulatory agencies cannot conduct oversight. What is truly needed is a structure where trading parties see everything, regulatory agencies see what is necessary for oversight, and other participants are shielded from irrelevant information.

Canton Network achieves sub-transaction-level privacy at the protocol layer, with smart contracts delivering only the relevant parts of the transaction to each participant. In exchanges involving securities and cash, banks only see cash movements, securities registrars only see securities movements, while sellers, buyers, and trading applications see both sides simultaneously. This selective visibility directly meets regulatory audit requirements.

Elliptic and TRM Labs serve as super validation nodes and integration partners accessing the network to conduct AML supervision and maintain compatibility with reporting requirements from major jurisdictions.

3.2 Condition Two: Atomic Settlement and Cross-Application Interoperability

In government bond repo transactions, tokenized government bonds and cash exchange in a single transaction. The digital green bonds issued by HSBC were used as repo collateral by Bank of East Asia within days.

To enable such transactions, atomic settlement is required. Every step must be completed simultaneously or canceled simultaneously. Selling a government bond and receiving cash usually takes two days, sequentially passing through clearinghouses, custodial banks, and settlement systems. If one party has already transferred the asset while the counterparty goes bankrupt, the first party to execute will bear the loss. The collapse of Lehman Brothers illustrates this consequence: unsettled transactions locked the market for weeks because one party had already transferred the asset while the other had gone bankrupt.

Atomic settlement eliminates this issue. At the initiation of a transaction, all parties validate the validity of their positions and send approval signals. Execution requires unanimous approval. If any party refuses, the entire transaction is canceled. Once confirmed, the transaction is irreversible.

3.3 Condition Three: Public License Structure

Conservative global financial institutions such as HSBC, UBS, Société Générale, and LSEG repeatedly appear in Canton’s use cases for structural reasons.

In December 2022, the Basel Committee on Banking Supervision (BCBS) categorized tokenized assets into two groups. Group 1 covers tokenized traditional assets and stablecoins, subject to the same capital requirements as the underlying assets; Group 2 covers assets issued on unlicensed blockchains, with risk weights as high as 1250%, equivalent to requiring banks to hold capital equal to the full value of the assets.

The capital burden of the same bond varies dramatically depending on which blockchain it resides on. Funds like BlackRock’s BUIDL, which thrive on Ethereum, are viable because their main holders are exchanges, DeFi protocols, and crypto funds, entities outside the Basel regulatory perimeter.

For regulated global banks, there are two options to hold the same asset on their balance sheets. Unlicensed chains fall under Group 2, creating significant capital pressure. Closed private chains avoid regulatory friction but sever institutional connectivity.

Canton Network addresses this dilemma through a public license structure. Application providers directly define the validation standards and access rights for participants, with each transaction validated only by the nodes of the parties involved. By alleviating the core risk factors identified by Basel on unlicensed chains, Canton’s design features align with the requirements for Group 1 handling by the BCBS.

4. Institutional-Level Design Architecture of Canton Network

Canton Network is designed from the ground up for institutional finance. The company Digital Asset, which developed the Canton protocol and Daml smart contract language, has received investments from global institutions such as JPMorgan, Citigroup, Goldman Sachs, and DTCC, and has accumulated firsthand experience in institutional finance through projects like replacing the ASX settlement system and rebuilding DTCC’s credit derivatives infrastructure, directly translating these frontline experiences into technical capabilities.

4.1 Daml: Embedding Authorization and Privacy into the Language Itself

In institutional finance, access control is not a peripheral requirement but the essence of the transaction itself. In bond issuance, if underwriters leak data, market prices shift prematurely; in repos, if collateral sizes are exposed, counterparties lose negotiation leverage. Authorization is not an add-on to the transaction but part of it.

Canton Network uses Daml to define data permissions at the code level. When writing contracts, the same code specifies who the signers are, who the observers are, and who has the authority to execute specific actions. Business logic and privacy policies are no longer managed separately. The contract itself defines who can do what.

4.2 Canton Protocol: Consensus Verified Only by Transaction Parties

If Daml defines authorization, the next question is how this authorization is executed in actual transactions. Standard blockchains record each transaction identically across tens of thousands of nodes globally. If transaction data can be read by any node, the previously defined privacy loses its meaning.

Canton addresses this issue by limiting visibility and validation to the parties with a stake in the transaction. Sub-transaction Privacy: In a single transaction, each party only receives the portion relevant to them. Transaction data is end-to-end encrypted, with decryption keys delivered only to those with the corresponding permissions defined by Daml. Stakeholder Consensus (Proof-of-Stakeholder): The parties to the transaction are the validators. Third parties cannot see the data, and false validation is invalid. If the transaction records of the parties do not match, discrepancies surface immediately; if either party refuses, the transaction does not proceed.

What should not be seen is neither visible nor involved in validation; what should be seen is only validated for the parts that can be seen.

4.3 Network of Networks: Subnet Architecture Similar to the Internet

Each institution’s authorization policies, governance structures, and fee models differ. An institution has no reason to adopt another’s rules in their entirety. Canton Network allows participants to construct subnets according to their required structures. Participants control through whitelisting. Governance policies determine whether transaction approvals are decided by a single operator or a majority of a consortium. Fee structures, processing speeds, and compliance check timings can all be independently configured per subnet.

In the case of multiple subnets, how transactions between subnets are handled becomes an issue. The standard bridging method locks assets on one side and mints new assets on the other. If a single custodial key is compromised, the entire asset pool collapses. The combined losses from just three hacking incidents—Ronin, Wormhole, and Nomad—exceed $1 billion. Canton does not move assets but keeps them on their respective subnets while updating ownership on both sides’ ledgers.

For example, in the collateral transaction between HSBC and East Asia Bank, the bond issued by HSBC remains on the HSBC subnet, while East Asia Bank’s repo application directly uses that bond as collateral to execute the transaction. HSBC verifies the bond end under its subnet rules, while East Asia verifies the cash end under its own rules. Once both subnets send approval signals, ownership is updated simultaneously on both ledgers.

4.4 Global Synchronizer: Synchronizing Transactions Without Viewing Data

When multiple subnets exist, infrastructure is needed to determine the order of transactions between subnets. However, if this infrastructure can read transaction data, the entire privacy architecture collapses. A structure that hides data from the parties while being visible to operators exposes the most sensitive information to the broadest audience.

Global Synchronizer resolves this contradiction. It sorts transactions without decryption permissions, much like a postal system delivering sealed envelopes: receiving information, ordering it, and delivering it to the destination, all without knowing what is inside the envelope.

The validation structure operates in two layers. Validators: validate application-level transactions, only seeing their own transactions as parties. Super Validators: operate the Global Synchronizer and reach consensus on transaction order but do not see transaction data. According to Canton Network data, super validators are limited to verified institutions and will expand to over 45 by April 2026. Infrastructure operations and data access are structurally separated.

4.5 CIP-56: Standards for Asset Compliance

If the previous four components are the infrastructure, CIP-56 is the rule set that assets must adhere to on this infrastructure. Assets that do not meet the standards are incompatible with wallets, exchanges, and payment applications. If compliance procedures like KYC cannot be embedded in the standards, institutions must operate independent systems in parallel.

CIP-56 is the interface standard defining token issuance and transfer on Canton. It is the Canton version of Ethereum’s ERC-20, with three additional features tailored for institutional environments. Privacy-Protected Balance Management: Balances and transaction histories are only visible to authorized parties. Unlike ERC-20, wallet balances are not publicly exposed. Multi-Party Transfer Approval: Transfers are only completed when both the token issuer and the recipient provide approval. KYC and whitelisting are embedded in the token standard itself. Native Atomic DvP Support: Assets and cash are exchanged simultaneously in a single transaction. ERC-20 requires separate smart contracts or DEX infrastructure to achieve this.

Assets compliant with CIP-56 can operate across all compatible wallets, exchanges, and applications without modification. Bitwave’s USDCx payments and Tradeweb’s on-chain repurchase of U.S. Treasuries against USDC in December 2025 are both built on CIP-56.

5. Canton Network Expands to Asia

Canton Network has established its institutional infrastructure foundation and market presence in the U.S. and Europe over the past few years through a growing number of practical cases. This expansion is now extending to Asia.

South Korea is making the fastest progress. According to the Financial Services Commission, the amendments to the Capital Markets Act and the Electronic Securities Act, which establish a legal framework for the issuance of security tokens (STOs), were passed in the National Assembly on January 15, 2026. Distributed ledgers are officially recognized as legally effective electronic registries, and rights recorded on-chain hold the same legal status as those under the current electronic securities law. The amendments will take effect in January 2027. The government has also listed "Digital Asset Ecosystem Development" as one of the 123 national policy priorities under the Financial Services Commission, signaling a rapid establishment of a legal framework for stablecoins denominated in Korean won.

Institutions are not waiting for the legislation to be finalized. Major brokerages such as Future Asset, Korea Investment Securities, and NH Investment & Securities have already completed system construction through a consortium for STOs; banks have formed custodial alliances to seize leadership in this field.

Hanwha Investment & Securities is the most active on Canton. In its RWA department’s recruitment in February 2026, the job posting listed "experience or understanding of Daml script development on Canton Network" as a preferred qualification for Web3 backend roles, indicating that internal capability building around Canton-related infrastructure is underway.

Momentum further accelerated in June 2026. Shinhan Asset Management and Shinhan Securities signed a memorandum of understanding with the Canton Foundation. Both parties will directly participate in the governance of the Canton Network and work together to connect Korean financial products with overseas investors. KB Securities followed suit, conducting joint research with the Canton Foundation and blockchain infrastructure company Wavebridge on the application of distributed ledger infrastructure in domestic capital market transactions, aiming to issue and distribute products backed by domestic financial assets in the global market.

Other Asian markets are progressing in parallel. In Japan, JSCC, Nomura Holdings, and Mizuho Financial Group launched a joint tokenization proof of concept using Japanese Government Bonds (JGB) as collateral for Canton in April 2026. In Hong Kong, HKFMI has integrated Canton technology into the Central Clearing System (CMU) for government bond settlements. As a settlement institution under the Hong Kong Monetary Authority, HKFMI’s adoption makes this case one of the first instances of deploying Canton at the level of monetary authorities. In Singapore, Hydra X launched structured product SVT through Canton within the MAS regulatory framework, completing real-world validation.

The regulatory framework is taking shape, and institutions are building upon it.

6. How to Get Started

The market has been launched. Institutions considering entry need to answer two questions: in what form to participate and how long each stage will take. Without a clear entry method, resources will be scattered across multiple competing priorities; without a realistic timeline, decisions will be repeatedly delayed.

6.1 Forms of Participation

The correct starting point depends on where the institution stands today. There are five broad paths to enter Canton, arranged in increasing complexity.

Node Operation is suitable for institutions new to digital assets, allowing them to verify their own transactions without needing to stake capital, and they can delegate to NaaS (Lloyds Bank, SBI DAH belong to this category). Foundation Membership is suitable for institutions seeking to participate in governance, providing input on operational standards and policy directions by participating in boards or working committees (BNP Paribas, BNY Mellon, DTCC, Euroclear, HSBC, SBI DAH belong to this category). Asset Issuance is suitable for asset management companies and issuers with tokenizable assets, allowing them to tokenize assets and bring them to market, with CIP-56 enabling automatic connectivity to Canton applications (HSBC Orion Green Bonds, Hashnote USYC, BitSafe CBTC belong to this category). Legacy Infrastructure Integration is suitable for exchanges and wallet providers that have dealt with digital assets, trading and custodying Canton assets under the CIP-56 standard (BitGo, Fireblocks, Kraken, MEXC, Archax belong to this category). Custom Application Development is suitable for institutions with resources aiming for differentiation, allowing them to design new business logic directly, which involves the highest investment and has the greatest potential for differentiation (LSEG DiSH, Broadridge DLR, Goldman Sachs GS DAP, Tradeweb belong to this category).

The choice of entry path depends on the institution's current position. Starting directly with asset issuance is not a realistic first step. A natural entry point is through node operation or Foundation membership, allowing institutions to experience the Canton ecosystem and direction directly before layering in asset issuance and infrastructure integration, ultimately leading to custom application development. These five options are not mutually exclusive alternatives; a better understanding is that they build upon each other: institutions start from what they can manage and gradually construct a more complete presence over time.

6.2 How Long Each Stage Takes

The trajectory observed by overseas institutions from initial assessment to stable operation generally follows a consistent pattern. In most cases, each stage takes no more than a year, and proactive institutions can advance to the next stage in as little as three months.

Taking LSEG's DiSH platform as an example, it first completed a POC on Canton with a consortium of Digital Asset and financial institutions, and then officially launched in January 2026. SBI Digital Asset Holdings will simultaneously serve as a super validator and obtain Canton Foundation Premier membership in July 2024, establishing itself as a core participant in the network.

Each stage must be completed in order and cannot be skipped. The entire process typically takes about a year. Among all stages, the first stage (Assessment and Learning) is the most critical. Although the established goal of this stage is to assess Canton's technical architecture and infrastructure design, the more fundamental work lies internally.

Institutions need to determine which assets to tokenize, which business units these assets belong to, and whether the internal decision-making structure is in place to act accordingly. Entering the second stage without answering these questions often leads to a regression to the first stage. Institutions considering entry into Canton should first address these internal issues.

7. The Window is Open

Thirty years ago, the internet reshaped capital market infrastructure; once the infrastructure is built, it is difficult to change easily. The governance structure, token standards, and super validator list established today on the Canton Network will form the backbone of the next generation of capital markets. Institutions that join while standards are still being formulated will gain structural advantages that are difficult to replicate once the framework is solidified.

The first step does not need to be large. Delegating a verification node, sending developers for Daml certification, or committing to a one to three-month assessment are all viable entry points. World-leading financial institutions have already established positions on the same infrastructure, and the network's expansion into Asia is gaining momentum.

Institutions that acted first on internet infrastructure in 1996 were not making speculative bets. They were responding to two pieces of evidence: the technology had worked, and the cost of delay was rising. Today, the same evidence is also before us.